New EC at Sumang Walk

momoeagle

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The article only concern itself about affordability of condo via mortgage, and not about the rest of a person's life events, including middle age crisis, etc.

After 10 years, only with $37k cash, means only a savings of $3.7k per year, or $308 a month. It means the person spends a great deal of the income else where. Additionally, the calculations had assumed no prior property for the person. We can safely calculate that the monthly expenditure was $3292

To even afford $2k per month mortgage, the single have to forgo saving that $308 a month, and even fork out additional $1.7k. Surely this will affect the quality of life significantly.

Let's do one more calculation.
For 4.5k, take home is 3600, and OA contribution is 600.
After deducting 2k mortgage (entire OA contribution used), there is only $2.2k left for spending (this is already down from $3292).
Now you have to deal with condo management fee, let's say $200, electricity and water $200, $1.8k left.

It is not impossible to survive on $1.8k, but the quality of life have to be severely compromised. Remember, it was $3+ k earlier.

Of course, if we follow the article, and attempt to do $2.7k a month to clear the mortgage, we are left with $1.1k a month.

Assuming the person still manage to save $100 the month (i.e. spend a mere $1k on himself, and give nothing to parents), after 20 years, he/she may have fully paid up the property, but in terms of bank accounts, he/she will have a grand total of

$100*20*12 = $24k cash
with near $0 in CPF OA

and a nice $450k property that is 20 years old, at the nice young age of 53.

I haven't even gone on to talk about property tax.... and income tax, and increases in GST and transport fees, etc etc etc.

We assume the single has an extremely stable job that will minimally pay an average of $4.5k per month all the way to age 53. And that interest rates stay at the same rate for the next 20 years.

Sounds a very cool idea.
 
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Braun8

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EC prices are insane now. How can a couple with <14k income afford such prices; maybe most of the buyers are upgraders?

Agree, this Sumang EC prices are insane. There are plenty of resale condos selling below $900 psf in propertyguru, buyers and HDB upgraders should look at resale condos instead which are much cheaper.
 

momoeagle

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Agree, this Sumang EC prices are insane. There are plenty of resale condos selling below $900 psf in propertyguru, buyers and HDB upgraders should look at resale condos instead which are much cheaper.
Without pushing the EC and creating a sense that $1.2k is cheap because it is EC, it will be tough to justify the $1.6k psf at Buangkok MRT.

Excellent marketing.
 

runforyourlife

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Agree, this Sumang EC prices are insane. There are plenty of resale condos selling below $900 psf in propertyguru, buyers and HDB upgraders should look at resale condos instead which are much cheaper.

The winners are the condos beside, all rubbing hands with glee.
 

The_Davis

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The article only concern itself about affordability of condo via mortgage, and not about the rest of a person's life events, including middle age crisis, etc.

After 10 years, only with $37k cash, means only a savings of $3.7k per year, or $308 a month. It means the person spends a great deal of the income else where. Additionally, the calculations had assumed no prior property for the person. We can safely calculate that the monthly expenditure was $3292

To even afford $2k per month mortgage, the single have to forgo saving that $308 a month, and even fork out additional $1.7k. Surely this will affect the quality of life significantly.

Let's do one more calculation.
For 4.5k, take home is 3600, and OA contribution is 600.
After deducting 2k mortgage (entire OA contribution used), there is only $2.2k left for spending (this is already down from $3292).
Now you have to deal with condo management fee, let's say $200, electricity and water $200, $1.8k left.

It is not impossible to survive on $1.8k, but the quality of life have to be severely compromised. Remember, it was $3+ k earlier.

Of course, if we follow the article, and attempt to do $2.7k a month to clear the mortgage, we are left with $1.1k a month.

Assuming the person still manage to save $100 the month (i.e. spend a mere $1k on himself, and give nothing to parents), after 20 years, he/she may have fully paid up the property, but in terms of bank accounts, he/she will have a grand total of

$100*20*12 = $24k cash
with near $0 in CPF OA

and a nice $450k property that is 20 years old, at the nice young age of 53.

I haven't even gone on to talk about property tax.... and income tax, and increases in GST and transport fees, etc etc etc.

We assume the single has an extremely stable job that will minimally pay an average of $4.5k per month all the way to age 53. And that interest rates stay at the same rate for the next 20 years.

Sounds a very cool idea.

Sounds like almost everyone else
 

Braun8

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True. Quite a fair number of people are stretched like that. :(

Recession could be coming and the property cycle could be in a downtrend. Probably better to wait for the prices to fall in the recession, falling prices is already happening in the resale market.

More bad economic news today, PAP govt slashed their 2019 GDP forecast to 0.5%. This is the worst GDP performance since the 2009 recession. Bank economists are expecting a technical recession this year.


Singapore slashes annual GDP forecast to 0-1% amid ‘strong headwinds’

13 Aug 2019

SINGAPORE: With the economy likely to continue facing “strong headwinds” for the rest of 2019, Singapore has cut its expected growth for the year to between 0 to 1 per cent.

The Ministry of Trade and Industry (MTI) said on Tuesday (Aug 13) it expects annual gross domestic product (GDP) to come in “at around the mid-point of the forecast range”.

Read more at https://www.channelnewsasia.com/new...nual-gdp-forecast-to-0-1-amid-strong-11803990
 

Merg91

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Well, some here may believe the govt is going to do nothing & see the economy falters.....
The coolings can be easily reversed if needed.
Property sector affects many sectors, be it construction, owner spending etc etc.

Remember it would affect your job /hdb flat value.

One or two home owners may be forced to downgrade but most are not with already so many loan restrictions.
Most developers are cash rich too.
 
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twosix

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my thought for now is to stay off huge investments like buying properties. the trade wars are creating chaos to the world. better let the dust settle first, and when is this is unknown.
 

8zaoyu

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my thought for now is to stay off huge investments like buying properties. the trade wars are creating chaos to the world. better let the dust settle first, and when is this is unknown.
Ya, if u r holding a potentially 1.2 mil 4 rm just-MOPed HDB or 1.5 mil 5 rm just-MOPed HDB, these prices will hold till yr kids graduate, they will be thankful of the memories living in it till they getting their own.
 

momoeagle

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Recession could be coming and the property cycle could be in a downtrend. Probably better to wait for the prices to fall in the recession, falling prices is already happening in the resale market.

More bad economic news today, PAP govt slashed their 2019 GDP forecast to 0.5%. This is the worst GDP performance since the 2009 recession. Bank economists are expecting a technical recession this year.


Singapore slashes annual GDP forecast to 0-1% amid ‘strong headwinds’

13 Aug 2019

SINGAPORE: With the economy likely to continue facing “strong headwinds” for the rest of 2019, Singapore has cut its expected growth for the year to between 0 to 1 per cent.

The Ministry of Trade and Industry (MTI) said on Tuesday (Aug 13) it expects annual gross domestic product (GDP) to come in “at around the mid-point of the forecast range”.

Read more at https://www.channelnewsasia.com/new...nual-gdp-forecast-to-0-1-amid-strong-11803990
What could be worse, is stagflation.
 

momoeagle

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Ya, if u r holding a potentially 1.2 mil 4 rm just-MOPed HDB or 1.5 mil 5 rm just-MOPed HDB, these prices will hold till yr kids graduate, they will be thankful of the memories living in it till they getting their own.

The "best" type of millionaire, own a million dollar property that keeps rising in price.

Can see can smell can touch.

Just... cannot buy food with it.

But hey! People are richhh! And some say that ah gong is not going to do nothing & see the economy falters.....! Can always reversed cooling measure easily if needed, and poof, our economy will bull run again! Property will always go up! 100%!
 

Merg91

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The price of ECs will never go back to the good old time if it falls.
Missed the earlier boat means that you simply have to pay more than the lucky 100 palms owners.

The wealth effect of the property ownership here is too strong for the govt to ignore if the fall is significant.
 

momoeagle

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The price of ECs will never go back to the good old time if it falls.
Missed the earlier boat means that you simply have to pay more than the lucky 100 palms owners.

The wealth effect of the property ownership here is too strong for the govt to ignore if the fall is significant.
yeah, you are the expert.

It will always go higher. Buy at 1.2k psf sumang sure can sell at 1.5k psf or even 2k psf

Huat ah
 

Passerboy

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Ya, if u r holding a potentially 1.2 mil 4 rm just-MOPed HDB or 1.5 mil 5 rm just-MOPed HDB, these prices will hold till yr kids graduate, they will be thankful of the memories living in it till they getting their own.

I don’t see 4 room HDB crossing the 1.2m mark being a norm, it is only the outlier, more so for 1.5mil (think record price is at 1.25m for the boonkeng CityView high floor unit?) If prices of HDB crosses 1.5mil, I would think 2 bedroom condo will see prices of 1.2m being the new norm even at OCR region.
 

birmingham123

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Actually from the words of majority here, it seems Samsung ec is a bad buy. However, not sure why still have so many people buy. maybe those buyers are just cash rich and nothing else to buy. And probably they also does not have much foresight in the property market as well..
 

Passerboy

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Actually from the words of majority here, it seems Samsung ec is a bad buy. However, not sure why still have so many people buy. maybe those buyers are just cash rich and nothing else to buy. And probably they also does not have much foresight in the property market as well..

I think it is because of the following factors-

1) those buyers want a new EC in Punggol District to be near parents or in laws and upcoming EC in 2020 are in tampines and Canberra which will also be priced in the same range of 11xx psf up
2) the buyers want a reputable developer (Sumang EC is by City Development)

There may be other factors present too, but I would think it is essentially these two factors.
 

Merg91

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400-500 bought it but must be feeling sorry by now.
Not sure why some believe every couple would stretch to the limit with <$1.5 million property.
I am not surprised if many borrow max but keep the cash for stocks & reits /cpf with at least 2.5% yield.

Actually from the words of majority here, it seems Samsung ec is a bad buy. However, not sure why still have so many people buy. maybe those buyers are just cash rich and nothing else to buy. And probably they also does not have much foresight in the property market as well..
 
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